Silver prices on India's Multi Commodity Exchange (MCX) moved lower on Friday. The decline followed weakness in global markets. Investors booked profits after recent gains. Concerns over US import tariffs also eased slightly.
Market Movement Details
MCX silver futures traded down by ₹1,139 per kilogram. This represented a drop of 0.39%. Prices settled at ₹2,90,438 per kg. The metal had touched a record high of ₹2,92,960 just a day earlier on Thursday.
In international markets, spot silver prices slipped 1.8% to $90.70 per ounce. Despite the daily drop, silver remained on track for a solid weekly gain. It was set to finish the week up over 13%. This followed an all-time high of $93.57 reached in the previous trading session.
What Triggered the Pullback?
The immediate price correction came after a key US policy decision. The United States refrained from imposing new import tariffs on critical minerals. President Donald Trump did not announce fresh duties at this time. However, he left the door open for potential future levies. This maintained a layer of uncertainty within the commodity markets.
Long-Term Bullish Factors Remain
Despite the near-term dip, fundamental support for silver stays strong. Its official designation as a critical mineral underpins demand. Silver plays a key role in several high-growth industries. These include solar energy production, electric vehicle manufacturing, and consumer electronics.
Analysts acknowledge the possibility of a sharper correction in the longer run. Yet, many believe silver could rally further first. The psychologically important $100 per ounce level is a clear target. A mix of fundamental and technical factors could drive prices toward this mark.
Analyst Perspective on the Rally
Ajay Kedia, Director at Kedia Advisory, shared his insights. He pointed to lingering uncertainty over US tariff policy. This uncertainty sustains a risk premium in precious metals like gold and silver.
"Gold and silver prices find support from multiple sources," Kedia said. "Ongoing US tariff ambiguity, geopolitical tensions, and expectations of persistent inflation all play a role. If tariffs materialize, they could push US consumer prices higher. This would further reinforce gold's traditional role as an inflation hedge, supporting the entire precious metals complex."
Technical Outlook Suggests Upside
On technical charts, silver has formed a specific pattern. Kedia noted the development of a rounding bottom pattern. This is generally interpreted as a bullish reversal signal. It often indicates the start of a fresh upward trend.
A sustained breakout above key resistance levels is crucial. If achieved, it could propel prices toward the $100 per ounce milestone. This upward momentum would likely draw support from several ongoing themes. Persistent geopolitical tensions, a global supply shortfall, and rising industrial demand are key. Demand from the clean energy sector is particularly significant.
Significant Risks on the Horizon
Kedia also issued a note of caution. He warned that after potentially hitting $100, silver prices could witness a significant correction over the longer term. Several specific risks could trigger this downturn.
The Substitution Threat
One of the most pressing risks is substitution. Soaring silver prices are squeezing manufacturers, especially in the solar industry. Spot silver prices have more than tripled over the past year. This has sharply increased production costs for solar panel makers.
The financial impact is stark. The trace amount of silver used in solar cells now accounts for about 29% of a panel's total cost. This is a massive jump from just 3.4% in 2023 and 14% last year. These figures come from BloombergNEF. The cost pressure arrives as losses across the solar industry continue to mount.
In response, panel manufacturers are accelerating their efforts. They aim to replace silver with cheaper alternatives like copper. Silver paste is a critical input for forming electrical contacts in solar panels. Manufacturers have consistently worked to reduce silver usage to cut costs.
Consumption has already fallen. It averaged 8.96 milligrams per watt in 2025, down from 11.2 milligrams in 2024. "These substitution efforts are now accelerating," Kedia stated. "China's Longi Green Energy Technology has announced plans to begin replacing silver with base metals. This substitution risk is likely to weigh on silver prices going forward." Other major players like Jinko Solar and Shanghai Aiko Solar Energy are making similar shifts.
Index Rebalancing Pressure
Another near-term risk stems from a major commodity index rebalancing. The 2026 Bloomberg Commodity Index (BCOM) rebalancing occurred between January 8 and 15, 2026. The process enforces strict rules: a 15% cap per commodity and a 33% limit for any single commodity group.
With BCOM-linked assets under management around $109 billion, passive funds must rebalance. This triggers significant buying and selling in commodity futures contracts.
"Gold's weight in the index is set to fall from 20.4% to 14.9%," Kedia explained. "Silver's weight could drop sharply from 9.6% to as low as 1.45–4%. This could result in nearly $14 billion of selling pressure across the complex. Silver alone could face up to $7.1 billion in futures sales."
These mechanical, rule-based sell-offs could trigger heightened volatility in silver prices in the near term. This would occur even as the broader bullish narrative for the metal remains intact.
A Celebrity Warning
Robert Kiyosaki, author of the popular book Rich Dad Poor Dad, has also issued a warning. He suggested silver prices may be nearing a peak. A sharp pullback could occur before any longer-term uptrend resumes.
In a social media post, Kiyosaki urged investors to "be careful." He noted the recent rally has attracted speculative sellers who could trigger a correction. Despite this caution, he reiterated his overall bullish outlook. Kiyosaki stated he would continue buying silver even up to $100 an ounce. He also advised patience in the event of a market crash.
Disclaimer: The views and recommendations mentioned are those of individual analysts or broking companies. They do not represent the views of Mint. Investors are advised to consult with certified experts before making any investment decisions.
